Contact: nadim.ahmad@oecd and seung-hee.koh@oecd
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Transcript of Contact: nadim.ahmad@oecd and seung-hee.koh@oecd
Measuring Non-Market Production Measuring Non-Market Production of Householdsof Households
OECD National Accounts Working Party Meeting Paris December Paris December 20102010
Contact: [email protected] and [email protected]
Drivers
• Better understanding of comparability of material well-being: catalyst from Stiglitz and many national studies….etc
Household production of non-market services
• SNA Production boundary includes goods produced on own-account but only dwelling services.
• Long debate on extension of production boundary to include other services – i.e. those that satisfy the third party criterion.
• But for a number of reasons, mainly the difficulty in determining a robust market price for these services, they have been excluded from the boundary.
Boundary or not…..
• ….there is merit in producing estimates, to give a better understanding of material well-being…. ……..Particularly in the context of international
comparisons….. as the work demonstrates
Methodology• Estimates the value-added of household
production– Includes a labour component – And a capital component
Valuing labour• Key is to estimate the cost of labour – two
schools of thought– Replacement cost– Opportunity cost
• Given a value, total labour costs = cost of labour*hours spent on own-account production of services
OECD Time-Use Surveys• Survey of 16+ population: 1140 minutes per
day broken down into: paid work, unpaid work, personal care, leisure, and other activities.
• Unpaid work, broken down into: • routine housework; • shopping; • care; • volunteering; • and travel related activities.
• Important to note that there may be some double counting.
Replacement cost approach: – Average hourly price of unregistered domestic
servants and baby-sitters
Opportunity cost approach: – Average post-tax hourly wage in total economy
Valuing the price of labour
Valuing Capital services• Capital input (K)
– PIM based - constructed from expenditures on consumer durables.
• Value of capital services: = the price of capital services per unit of the net capital stock multiplied by the net
capital stock K .
Where the price of capital services is calculated as
(r+d)*P(t) and
r = real rate of return (4%) d = depreciation rate (20%)
P(t) = price index of consumer durables
• Again, some double counting…..
Average hours worked - 2008
Contribution of labour only % of GDP, 2008
Total household production per capita converted with adjusted PPP, USD per capita, US=100
Decomposing the changes
Next steps • Correct for double counting• Refine capital estimates• Break down production into subcategories• Consider growth• Gender issues• Extending the concept from material well-being to
broader notion of well-being to incorporate Leisure
• Extend coverage to other countries.